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Strategies & Market Trends : Set the Controls For The Heart of the SUN

IQ 2.075

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Nov 14 9:30 AM EST

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To: Doug R who wrote (566)	7/29/1997 2:33:00 AM
From: Mr.Creosote	of 1156

Doug, I concur that the DJIA is at SELL countdown #10. I do not have the official DuaneDavis-TomDemark software but my own code showed BOTH the S&P-500 index and the NYSE Composite registering sell "13's" on the same day last week (Thursday 7/24/97). If this DeMark indicator ends up being right on this "sell" signal then I'll gladly join the DeMark club of "technicians". I was going to post a large list of recently completed sequentials but my scanner code crashed last night while searching my entire database of more than 10,000 stocks (still trying to track the problem). Fair to say though that at this time the overwhelming majority of sequentials I saw (~90%) are on the sell side. Can you say "this market is overbought"? On the other hand (as the one-arm economist once said) I do not find the frequency of successfull sequentials as high as DeMark's book appears to imply. In my brief study of this indicator thus far, a completed sequential catches a small minority of tops and bottoms (still trying to quantify the percentage). This is in fact one of the most important things DeMark has avoided discussing in his book. Lets face it folks, the only thing I want to know about a technical indicator is its hit-to-miss ratio when used according to the manufacturer's directions. By the way, anybody seen the new DeMark book? I'd be interested in hearing what you think of it. I just got mine and although it appears to have a lot more material than the first, its missing the same thing as the first one: information regarding success-vs-failure of most (if not all) technical tools proposed. I'd personally pay 4 times more for the book if he included backtesting results for his tools. That would save me a tremendous amount of work testing his market theories (time which I now find better spent developing my own indicators and trading system from scratch). Still think this indicator has merit but needs more work in order to be more usefull. I strongly feel that the huge number of qualifiers is an attempt toward optimization (although unintentional) and need to be replaced by something simpler. Have a great week, JS

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